What is Zero Brokerage Trading Account and How Does It Work?

Zero brokerage trading is a new way for brokers to attract new traders and increase trading activity on their platforms. But what does it mean? How does it benefit you as the trader? How do you open a zero-brokerage trading account? 
 
Let’s look at that and more below. 

What Does Zero Brokerage Mean? 

“Zero brokerage” refers to waived fees and commissions when you execute trades on your broker’s platform. Essentially, zero brokerage saves you money in terms of commission outflow. Many top brokerage firms have already offered zero brokerage accounts, allowing traders and investors to build portfolios for free. To brokers, this is an excellent way to grow the number of traders on their platforms and promote frequent market activity ^[1].  

If you’re new to trading, zero brokerage is an excellent way to get started at the lowest cost possible. Rather than choosing your broker based on the fees charged, you can now compare their services based on other factors like trading platforms and investment selections. 

What is Zero Brokerage Trading Account? 

Brokers generally charge a small fee to execute your buy and sell orders on their trading platforms. That’s one way they generate revenues and sustain their business. However, with a zero-brokerage trading account, you do not pay any brokerage fee on your account ^[2]. 

You can execute any size of trade without paying fees to your broker. That means you get to save the capital that would otherwise have been paid as fees and commissions. 

You’ll encounter two categories of zero brokerage accounts. They are: 

Monthly or Annual Brokerage Payment Plan 

This monthly or yearly payment plan is ideal for the frequent trader. It’s not popular or profitable for many brokers but attracts many traders.  

Zero Brokerage for Delivery Trades.  

The zero brokerage for delivery trades is ideal for swing and infrequent traders.  

How Does a Zero Brokerage Trading Account Work? 

A zero-brokerage account works in a similar manner to a standard trading account. The only difference between a normal trading account and a zero-brokerage trading account is the requirement for brokerage fee or a minimal fee.  

Advantages of Trading with Zero Brokerage Trading Accounts 

Here are the advantages that make adopting zero brokerage trading accounts:  

Cheaper costs 

Using a zero-brokerage trading account is a clever way of saving costs. That allows you to keep more of your capital and potential upside from the trades you make ^[3].  

Easy Account Opening Process 

Compared to other trading accounts, zero brokerage accounts are relatively uncomplicated to own. Most brokers offer paperless signups where traders can register online.  

Demo Accounts 

Even though you pay minimal to zero fees for real trades, you can also practice on a demo zero brokerage account ^[4].  

Access to Multiple Assets 

You can get unlimited access to all authorized currency pairs. Depending on your broker-client agreement, you may access as many assets in the stock markets as possible  

Customer Care Support 

Zero brokerage trading accounts have led more traders to participate in the markets. Many brokers offer customer support and timely feedback to customers to make the trading process seamless. You can now reach your broker’s customer support through the phone, mail, live chat or social media.  

Better Trading Platforms 

To make trading even more attractive, brokers have invested in providing seamless platforms to their clients. You can now trade from your computer, a web-based platform or your smartphone or tablet.  

Research Tools 

Many brokers now offer research, educational, and analysis tools. Since trading is a continuous learning process, brokers can now equip beginners and proficient traders with timely information and knowledge that increases the success rates of trades.  

Transparency 

Many zero brokerage accounts have clear-cut fees and charges. With Zero brokerage accounts, your broker informs you of your expected charges right off the bat. That reduces the risk of hidden charges and other secret fees.  

Final Thoughts 

You can start trading with opening a zero-brokerage account, especially if you’re starting out. That means you’ll pay fewer charges for your trades.